Goldman Sachs, the nation’s most powerful financial company, has reported the richest quarterly profit in its 140-year history: $3.44 billion between April and June. Goldman’s record profits come just one month after it repaid $10 billion of TARP money to the US Treasury, freeing itself from restrictions on year-end bonuses. We speak to Matt Taibbi, whose new Rolling Stone article argues that “Goldman Sachs has engineered every major market manipulation since the Great Depression.”

Continue Reading As Goldman Sachs Posts Record Profits, Matt Taibbi Probes Role of Investment Giant in US Financial Meltdown

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  2. Sklein–The “economic coup” statement usually comes near the end of a conversation. Generally, it stats with commiserating about some incomprhensible news of the day (such as today’s news that Neil Barofsky’s, special inspector general for the Treasury’s Troubled Asset Relief Program, statement that U.S. taxpayers may be on the hook for as much as $23.7 trillion.)

    U.S. Rescue May Reach $23.7 Trillion, Barofsky Says

    People aren’t stupid–they are overworked, overstressed, and uneasy. They’re trying to understand, but are overwhelmed by the obfuscating blather of the MSM. It helps to give facts and let them put things together at their own pace. One of my favorite “facts” to start with is Shiller’s chart showing the history of home prices since 1890:


    History of Home Prices

    Catherine is a financial wizard who undestands things about money that I can’t begin to fathom–but everyone I talk to understands home prices and I use this chart as a basis to start explaining what banks, the Treasury, and Fed have been doing over the decades. Generally, by the end of the discussion many people come on their own to the observation that “They are trying to reinflate the bubble so they can cash out on the taxpayers dime….”

    (BTW–Sometime in the last couple years I saw a chart that combines Shiller’s 100-year History of Home Prices with the history of national average wages over the same period. I haven’t been able to find it since first seeing it. Does anyone know where it can be found? I’d sure appreciate it.)

    Here’s the link to TAE– The Automatic Earth. They see massive deflation over the next few years in a fast crash. Stoneleigh, who cohosts the site, wrote yesterday: “Deflation will end when the (small amount of) remaining debt is acceptably collateralized to the (few) remaining creditors. Deflation carries the force of a tsunami or a cat 5 hurricane once it builds up momentum.” Only after this tsunami finishes does Stoneleigh see inflation being a significant concern. As you may know, Catherine posits a “slow burn” as TPTB milk the system for all it’s worth. Personally, I’ve no idea what tomorrow will bring, much less the next few years. We live in a non-linear world where I’m always surprised. Either way, I plan for the worst and hope for the best. To my astonishment, I’ve found that “planning for the worst” has generally resulted in becoming a more well-rounded, healthier, happier person.

    Guy–Spirituality and a faith in one self’s abilities go miles in purveying a positive force that others will find engaging and want to be around and build with.

    This is so true. Often when talking with group about the transition, we go through Orlov’s five stages of collapse: Financial, Commercial, Political, Social, and Cultural. Orlov makes the point that the line MUST BE DRAWN at preventing Social collapse, as this is where we stay human. Generally, as people talk the question comes up, “What keeps us from despair?” What allows us to keep our spirits going as we plan for contingencies we may not even have conceived before?” Faith, of course. In groups, I usually define faith as “the certitude that you’ll be okay when you encounter something which you have no previous knowledge or experience of; ie, the complete unknown.” Secularists can get ahold and identify with this definition–the spiritual run with it.

  3. PermaculturePrana:

    I think Ric hit it on the head. I think asset mapping our own lives, taking inventory of the resources we have and discovering new paths through the journey makes a lot of sense. Indeed, I have found that my own resourcefulness, networking has allowed me to navigate new territories and build on the knowledge of others. I think community building is really important – I think that is the achilles heal in trying to get this different model that we would like to see take root. We live in a society where we are dependent on the system to supply what we need, but we have an illusion that we are not dependent on each other. Where I live – and maybe it is the same with you, I don’t even know neighbors I have had for years. There is this social awkwardness that exists – I feel that in some ways we are socially underdeveloped. I think finding community is the key to building resources. As Catherine has pointed out – it is the people you build trust and relationship with that will have your back should you need it – and it is through this networking that we find new opportunity, knowledge and strength. I think that is why, for example, a country like Bolivia, although poor, was successful in getting a government in place that started to put the majority population’s interests ahead of the traditional oligarchical interests. These people had community and familial bonds that were strong – they had organization – they had networks – and they had resilience.

    I think that personal development and broadening inter-personal skills is important for us a individuals to actually get in there and start making these crucial connections and building networks. Spirituality and a faith in one self’s abilities go miles in purveying a positive force that others will find engaging and want to be around and build with.

  4. Ric:

    When I talk to adults about the systemic economic coup they immediately call me a consiracy theorist. The method of habitually discounting what “truth tellers” say by labeling them “conspiracy theorists” is quite a good tool the monopolists have created and employed to keep people confused and uninformed.
    I’m new to this site and I think I have quite a bit of intestinal fortitude ;). What does TAE stand for?

  6. PermaculturePrana – Everyone’s situation is different. How we adapt in this transition depends on our ages, resiliencies, interests, joys, backgrounds, education, skills, assets, family, the country we live in, weather, and on and on. One of my favorite stories about adapting to radical financial collapse appeared in an LA Times artile about the breadlines in Zimbabwe:

    Queuing for crumbs in a Zimbabwe bread line

    In the article, David Kaodza does significantly better than many others because of his intelligence, entrepreneurial skills, bribery talents, and interpersonal charm. Catherine’s stories and suggestions in the Solari Reports are excellent. One of my favorites is her discussion of what to do with money in the May 14(?) report. Her Solari reports have helped push me into discovering that there’s a large informal barter economy in our area that I never knew existed. Am currently learning blacksmithing, welding, and poultry-growing from a third generation blacksmith whose interested in the computer skills I can show him. 😉 As time goes by, I’m increasingly convinced that adapting to changes means finding joy in new friends and opportunities.

  8. great point guy…do you have specific suggestions for what people can do? i’d love to hear any and all perspectives you think are viable!

  9. Ric.

    Great points.

    It is good to dig to find out what is going on. But we can get caught up in that and spend a lot of our energy “exposing” but not doing productive works to build something better. It is easy to have a scapegoat, but the scapegoat only functions to obfuscate the root causes.

  11. Our elected leaders have worked hard to bring home the pork.. which is comparable in scale to the political contributions. Small kick-backs for the overall grand losses that are created with massive fraud and fraud-ridden, over-complicated programs whose overhead employs a huge constituency and creates an ever increasing debt. No-bid contracts for some, special laws written that favor a few, or swelling the Treasury with GS insiders who hire their friends to manage a bailout that has only transferred money to a few and created more debt for everyone else.

    States are now in a situation where they are searching for funds.. not a lot different than if Washington had been closed down. Would we be any worse off if the Congress had been on vacation for 8 or 10 years? If California legalizes marijuana and taxes it, other states will follow, grasping for dollars that are now going to drug cartels. This may be the only silver lining in this mess. If marijuana is legalized, what will the cartels use to replace this income, or have they already acknowledged this was going to happen and have laundered enough to switch to “legitimate” business.

    Incumbancy is so powerful because people believe that their own representative is not the problem. It is all those other people. In cleaning out Washington, it will take a change in the mindset of the entire country and trust that new people can make a difference. We see what Obama’s change has brought.. a continuation of the same thing, with bills being ramrodded through without enough time for deliberation or public scrutiny, as if public scrutiny has any influence. The bailout was heavily opposed by the people, yet it was forced through and has had the expected outcome.. an extension of the period of time that any correction to the economy can be made. The interest rates have been dropped and those depending on interest income are getting nothing as the Fed prints money to cover obligations.

    More and more people are losing their homes. With increasing unemployment, more people can’t maintain their homes and will turn to government aid which is already over-subscribed.

    The few in Washington who have been working for the people and have a grasp of the folly of increasing borrowing finally have a voice, but are being thwarted by procedure to get transparency. The bailout passing against public sentiment is a clue that we have lost control. I’m am reminded of Hitler’s dramatic films to create an illusion of unity and compare them to the mind control used by those who used fear.. both after 9/11 and the meltdown to push through self-serving agendas.

    Do our elected representatives have the gut-wrenching torment of job loss, foreclosure, lost retirement funds? Does Pelosi believe in anything? It has been over a year and finally a Commission is being created to delve into the mess, after the funds have been syphoned off. Why has it taken so long to do this? It should have been instituted immediately, instead of a bailout. The people would be in comparable situation, but at least there would have been a little confidence restored in our system.

    Congress was bullied into a bailout, believing that if they didn’t act the economy would collapse. It has collapsed. The bacon that Pelosi has brought home has been eaten and more and more people are lined up for breakfast.

  12. Goldman is a beaurocratic arm diligently doing it’s job–making money. Ilargi over at the Canadian Automatic Earth points out the red-button problem and suggests we get a grip on our real power:

    Right, enough with the Goldman Sachs bashing… If your government stubbornly and steadfastly refuses to -in order to stop the cheating and lying- apply the laws where they’re applicable, and change them where they need change, why would you expect Goldman to stop engaging in their favorite pastimes? … Blaming Goldman Sachs for your problems and your anger is nothing but a cheap diversion. Who did you vote for, and if it was the Democrats, what are they doing with their new found power? How is today different from 6 or 4 or 2 years ago? How different? Do you still believe in that change, or is it time to change your beliefs? Whatever you do, don’t blame Goldman. Don’t even blame Obama. Blame yourself. In the end, that’s the only way you can keep a grip on power. And on your life.

    We’re watching power lose legitimacy. I don’t know if it’ll be a fast crash or a slow burn, but examining our institutions (whether business, governmental, educational, or religious) and discovering they’re not what we hoped and expected them to be is like a teenager examining his parents and discovering their sorry humanity. Do we mature into self-relient, ethical, resilent people or blame others for our failure at not being the same? When I talk to adults about the systemic economic coup, fear generally appears in their eyes-they become like children again. To help, I often point them to this blog for constructive, comprehensive analysis–and to TAE if they have intestinal fortitude.

  13. Catherine Austin Fitts – Summer Intern Goldman NYC 1977 – I worked half the summer in the Mergers Department while Steve Friedman was running it and Bob Rubin was on the trading floor running the arbitrage department. The other half of the time was in the Fixed Income Department and Equity Sales. The next year at business school I persuaded Gary Gensler to interview with Goldman Sachs. When I took him to the Goldman party, the person who ran recruiting told me I had to get him a new suit. So we went to Brooks Brothers where I helped Gary buy a new suit. He ended up going to Goldman Sachs but not until he taught me how to tour on a bicycle…hence my ride across the country..now he is the Chairman of CFTC.

  15. Maybe one of the research groups for public justice could check each public servant’s financial disclosure for GS and map it.

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